Allkem Limited (ASX|TSX: AKE) ("Allkem" or "the Company") will release its Full Year Results on Thursday, 25 August 2022.
Managing Director and CEO, Mr. Martín Pérez de Solay and CFO, Neil Kaplan will conduct a live webcast briefing at 09:00 am AEST (Brisbane, Sydney, Melbourne) on the same day.
To pre-register your details and join the webcast briefing, please follow the link on the homepage of Allkem's website, www.allkem.co . Written questions may be submitted via the webcast and playback of the briefing and Q&A session will also be available on the company's website.
This release was authorised by Mr Martin Perez de Solay, CEO and Managing Director of Allkem Limited.
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Allkem Limited (ASX|TSX: " AKE" the " Company" ) provides an update on its global lithium portfolio, business activities and financial position 1 as at 30 June 2022.
In June Allkem became a constituent company in the FTSE4Good Index Series. The FTSE4Good is designed to identify companies that demonstrate strong environmental, social and governance (" ESG ") practices measured against globally recognised standards.
Allkem also achieved the highest available ‘Comprehensive' rating in the Australian Council of Superannuation Investors'(" ACSI ") annual detailed assessment of ESG reporting in ASX200 companies. This rating acknowledges ongoing reporting of material ESG risks and mitigation strategies, and transparency in reporting targets and performance. Established in 2001, ACSI provides a strong, collective voice on ESG issues on behalf of their members including 29 Australian and international asset owners and institutional investors managing more than $1 trillion in assets.
The Respectful Workplace Behaviours program was rolled out to all Australian based personnel including all employees and contractors at the Mt Cattlin operation. In partnership with Allkem's Employee Assistance Provider, 17 workshops have been conducted covering areas such as psychosocial hazards, sexual harassment, discrimination and bullying.
Allkem achieved its best results since the merger with a Total Recordable Injury Frequency Rate of 2.6 recorded at the end of the June quarter, a 23% improvement from the prior quarter and a Lost Time Injury Frequency Rate of 1.0 for the rolling 12 months. Two separate Recordable Injuries occurred during the quarter at the Mt Cattlin operations. Both contractor employees have fully recovered and returned to work and investigations have been completed with corrective actions implemented.
There was an increase in reported Significant Potential Incidents at operations over the quarter, indicating reporting maturity and improving recognition of near miss events as serious incidents. A Critical Control Management program was implemented at Mt Cattlin and Sales de Jujuy continued the implementation of a Behavioural Based Safety module.
COVID-19 cases impacted Mt Cattlin mine site over the quarter with the peak caseload of the Omicron variant in Western Australia occurring in May. Contractors and personnel followed site Biosecurity Protocols which were updated in line with government recommendations.
Biosecurity Protocols across the global operations remained in place and the impact of COVID-19 diminished proportionally to those countries' case numbers.
Community and Shared Value Program
Allkem is committed to regularly engaging with community stakeholders across all operations and providing positive and lasting benefits to the communities it works with.
The Shared Value team in Argentina provides long-term value to the local communities through initiatives based on five pillars; empowerment; transparency, education; health; local production and natural resources. Community engagement and consultation continues at each project. Initiatives continued during the quarter including education around the construction of the Sal de Vida project and technical and leadership training in both textiles and plumbing.
The James Bay project is also maintaining regular engagement with community stakeholders as part of the Environmental and Social Impact Assessment (" ESIA ") and Impact and Benefit Agreement (" IBA ") process, with the ultimate objective to ensure long-term benefits to the communities. Various consultations are organised with the Cree communities (Eastmain, Waskaganish, Waswanipi), the Community Special Group (School Board, Apatisiiwin skill development) to support training of local community members who want to work at the project and the Wabannutao Eeyou Development Corporation of Eastmain to discuss potential partnership and business development opportunities.
During the June quarter 24,845 dmt of spodumene concentrate was produced at 5.3% Li 2 O grade and within customer specifications which contributed to record breaking financial year production of 193,563 dmt averaging 5.6% Li 2 O grade.
Mining activities focussed on transitioning the source of ore from the 2NE pit to the 2NW pit where pre-stripping work continues. Recovery of ~42% was lower quarter on quarter (" QoQ" ) due to increased processing of stockpiled ore that contains basalt, however average FY22 recovery of ~56% was in line with full year guidance. Additional laser ore sorters have been installed to lower basalt content and improve plant performance. Magnetic separators will be operational by the end of the quarter which will further improve basalt separation from ore feed.
Mining capacity will be increased by the end of August from 750,000 to 1,000,000 bank cubic metres per month with mobilisation of larger trucks/excavator by the current contractor and the addition of third-party mining services. This will provide flexibility and further options to ensure delivery of budgeted mining volumes. These initiatives will assist and enable a ramp-up in ore production sourced from the 2NW pit from the end of the September quarter to achieve full year guidance.
37,837 dmt of spodumene concentrate was shipped during the quarter at an average grade of 5.4% Li 2 O, generating revenue of US$188.9 million at an average realised sales price of US$4,992/tonne CIF.
The FOB cash cost of production for the quarter was US$803/tonne which resulted in a gross cash margin for the quarter of 84% or US$4,189/tonne (~US$159 million). Cash costs were higher QoQ due to lower production volumes, lower recovery and increased stripping ratio, however FY22 cash cost of US$401/tonne was in line with full year guidance.
Table 1: Mt Cattlin FY22 and quarterly operational and sales performance
FY23 production and sales outlook Forecast spodumene production for FY23 is approximately 160 – 170ktpa as detailed in Table 2 below.
Customer demand in the spodumene market remains robust and spodumene concentrate pricing in the September quarter is expected to be higher than the June quarter
Table 2: Mt Cattlin - FY23 production metrics
Costs in FY23 will be higher than FY22 due to the ongoing development of the 2NW pit, lower production volumes, higher strip ratio, the decrease of ore grades from 1.24% in FY22 to 0.93-0.94% and associated lower recoveries. Ore grades in FY24 are expected to be 1.17%. Costs also remain high due to the ongoing impact of COVID-19 in Western Australia and the competition for skilled labour. Workforce retention programs are being developed to mitigate the impact of employee turnover.
Resource extension drilling Allkem commenced a three-phase resource extension program in mid-April of 147 holes for 32,685 metres of reverse circulation (" RC" ) drilling with the aim of a multiyear mine life extension.
Drilling in the first two phases will target the immediate extension to mine-life at depth. The first phase is aimed to convert 3.2Mt of inferred to indicated resource category and the second phase will test two pegmatite lenses along strike and at depth in conjunction with a scoping study to evaluate either the opencut or underground development of potential resource extensions.
As of 30 June, 37 holes and 8,690m of drilling had been completed and an update on results will be provided later in the September quarter. The current drilling program is expected to be complete towards the end of CY22.
Production Production for the June quarter was 3,445 tonnes, up 4% from 3,300 tonnes in the previous corresponding period (" PCP" ). Battery grade lithium carbonate production for the quarter was 45%.
Sales and financial performance Quarterly product sales of 3,440 tonnes of lithium carbonate included 45% of battery grade, in line with customer requirements. The sales volume was up 35% from the PCP and up 9% QoQ.
Total sales revenue of ~US$141 million was up 64% QoQ and up 553% from the PCP. The average price received was up 51% QoQ to US$41,033/tonne on an FOB 2 basis reflecting the very strong market conditions.
Cost and margins Cash cost of goods sold for the quarter was US$4,301/tonne with higher energy, labour and reagent costs in addition to Argentine inflation (~17.3%) outrunning currency devaluation (~12.8%) over the quarter. Gross cash margin for the quarter was 90% or US$36,732/tonne.
Table 3: Olaroz FY22 and June quarter production metrics
The lithium carbonate sales price for the September quarter is expected to remain similar to the June quarter.
Construction of the Olaroz Stage 2 Lithium Facility is progressing well. Commissioning of individual project modules are continuing as they are completed. First production is expected in late H2 CY22.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4cb065a6-ef84-4a6b-96b7-f5b14474a86a
By the end of June 2022, overall physical progress is ~88%. 12 of 15 wells are now operating and the remaining three wells are scheduled for completion in July. Evaporation ponds are complete and commissioned. Lime plant #3 is in the final stages of pre-commissioning with start-up scheduled for the end of July. Lime plant #4 is expected to be complete by September. Soda ash facilities reached 88% completion with the plant expected to be commissioning in September. Carbonation plant works progressed further and will be completed in the December quarter.
Sales in Q4 FY22 were up strongly to 15,185 tonnes of boron minerals and refined products which represents a quarterly increase of 25% and an increase of 36% from the PCP (Table 4Table ). Total sales revenue was up 24% QoQ and up 66% from the PCP with higher sales volume. Average realised price fell 1% QoQ due to a change in the sales mix but was up 22% PCP.
Table 4: Borax Argentina sales volumes
Construction of the Naraha lithium hydroxide plant in Japan is complete and commissioning activities continue. Water testing has already been completed, as preparation for plant start up is underway. First production is expected late September with minor delays being experienced due to travel and visa restrictions for commissioning personnel, and extended testing following the previously reported earthquake damage from March 16.
Sal de Vida is designed to produce 45ktpa of predominantly battery grade lithium carbonate through an evaporation and processing operation at the Salar del Hombre Muerto site. Development is being undertaken in two stages with Stage 1 targeting a 15ktpa production capacity and Stage 2 an additional 30ktpa.
Construction of the first two strings of ponds for Stage 1 has now reached ~32% completion with the first pond now completed and filled with brine (Figure 2). Project execution in H2 CY22 will focus on commissioning the first string of operational ponds and commencing construction of the carbonation plant and progressing towards operational readiness.
Camp expansion has progressed with additional beds installed and procurement for an additional 300 beds to increase the total capacity to 900.
Procurement for other long lead items and the tendering process for a 30% photovoltaic energy solution, has also advanced. Further engineering and permitting continues for the third string of ponds which reflects the increased production capacity of Stage 1.
The Stage 1 schedule is targeting first production in H2 CY23 with brine evaporation occurring during plant construction, allowing evaporated brine to feed the plant once commissioned.
It is proposed that once the commissioning of Stage 1 commences, the development of Stage 2 will occur sequentially.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/68113808-926f-4e52-bb5b-9fdfa3330344
James Bay is designed to produce ~320ktpa of spodumene concentrate through a mine and concentrator utilising hydro power over a project life of 19 years.
Project execution Allkem is targeting construction activities to commence in Q1 CY23 with commissioning in late H1 CY24. To achieve these milestones, key focus areas for CY22 include:
Detailed engineering progressed alongside procurement activities during the quarter including awarding key equipment packages (temporary camps, primary sub-station, process equipment, etc).
The clarification process for the ESIA continues at both Provincial and Federal levels in conjunction with the Cree Nation Government despite the lengthy strike of Quebec government engineers during the quarter. Efforts were made to minimise the impact of the Quebec engineers strike on the clarification process and meetings with both the Provincial and Federal are planned in July to review the information provided.
Demand Demand for lithium chemicals and spodumene concentrate remained strong during the quarter, despite temporary COVID-19 lockdowns experienced in China and associated supply chain disruptions.
Electric Vehicle (" EV" ) sales for the June 2022 quarter were estimated at ~2.2 million units, up ~50% compared to the PCP. EV sales in China alone were estimated at ~1.3 million units during the quarter, representing a ~90% increase from the PCP.
Demand for lithium chemicals in China within the battery supply chain saw a soft start in the June quarter due to lockdowns but subsequently bounced back strongly from May onwards. EV battery installation volumes were estimated at ~52 GWh during the quarter compared to ~29GWh PCP and in line with the March 2022 quarter.
Dominance of LFP battery formats (lithium, iron, phosphate) continued in the Chinese domestic market during the June 2022 quarter representing ~55% of battery chemistries.
Spot prices for lithium carbonate and hydroxide in China reduced by ~8% and ~5% respectively during the June quarter from all time high prices in March 2022 in response to the slowdown of activities associated with temporary lockdowns. Outside China, spot prices for lithium chemicals continued to rally reaching parity with Chinese prices. Spodumene concentrate spot prices registered record highs, increasing more than 50% QoQ, further reinforcing the tightness in the supply chain.
Contracted prices for lithium carbonate and spodumene were gradually adjusted up to reflect tight market conditions.
Supply Estimated lithium chemical production in China was up by more than 20% QoQ due to increased supply of mineral feedstock from local sources with improved weather conditions and higher spodumene concentrate imports from Australia.
Spodumene concentrate volumes shipped to China from Australia during the quarter were 50% higher QoQ with brownfield expansions and restart of idled capacity. This incremental spodumene volume will mostly be consumed during H2 CY22 and is expected to boost utilisation rates of lithium chemical plants in China.
Interest from automakers in the lithium industry continued to increase with Chinese and Western OEMs investing and funding directly into lithium assets in order to secure supply.
The race to secure key critical materials has further intensified across the EV battery value chain.
Corporate The executive team has been strengthened recently with the addition of several key personnel.
Karen Vizental has joined as Chief Sustainability and External Affairs Officer. Karen has extensive experience in multinational organisations such as Unilever and will lead corporate sustainability activities including Allkem's journey to net zero emissions by 2035.
James Connolly has joined as Chief Project Development Officer. James has extensive operating and project development experience in the resources sector. James has previously held senior positions with Vale Base Metals and Barrick Gold Corporation.
Christian Barbier joined the organisation as Chief Sales and Marketing Officer. Christian has a long history in sales and marketing of industrial minerals having held key positions with Iluka and Sibelco.
Christian Cortes has taken up the role of Chief of Staff working closely with the CEO after successfully heading the sales and marketing function. Christian will utilise his vast knowledge of Allkem and the lithium industry to support the CEO in executing Allkem's growth strategy.
Financial position At 30 June 2022, Allkem had available cash of ~US$663.2 million, up US$213.1 million from the balance at 31 March 2022 5 . Mt Cattlin contributed US$233.9 million cash from operations (including US$73.4 million related to a March shipment that was collected in early April) net of capex and working capital movements. Olaroz contributed US$20.2 million cash from operations net of funding approximately US$30 million of Stage 2 expansion project capital expenditure during the quarter. Cash spend related to Sal de Vida capex of US$22.2 million, James Bay development costs of US$10.9 million, Naraha project contributions of US$2.9 million, corporate costs of US$3.9 million and net costs for other projects of US$1.1 million.
US$7.9 million and US$83.9 million have been set aside as pre-completion guarantees for the Naraha debt facility and Olaroz expansion debt facility respectively. The US$83.9 million is available to Allkem to fund capex, VAT and working capital related to the Olaroz Stage 2 expansion, if required. The US$40 million BNP Paribas debt facility remains fully undrawn with a current maturity of December 2022.
Argentina economic conditions The official foreign exchange rate depreciated by 12.8% in the June quarter from AR$111.01 at 31 March 2022, to AR$125.23 at 30 June 2022 while inflation was ~17.3%.
The accumulated devaluation of the AR$ against the US$ for the 12-month period from 1 July 2021 to 30 June 2022 was ~31% while inflation was ~64%.
This release was authorised by Mr Martin Perez de Solay, CEO and Managing Director of Allkem Limited.
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This investor ASX/TSX release ( Release ) contains general information about the Company as at the date of this Release. The information in this Release should not be considered to be comprehensive or to comprise all of the material which a shareholder or potential investor in the Company may require in order to determine whether to deal in Shares of Allkem. The information in this Release is of a general nature only and does not purport to be complete. It should be read in conjunction with the Company's periodic and continuous disclosure announcements which are available at allkem.co and with the Australian Securities Exchange ( ASX ) announcements, which are available at www.asx.com.au .
Forward Looking Statements Forward-looking statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performances or achievements expressed or implied by such forward-looking statements, including but not limited to, the risk of further changes in government regulations, policies or legislation; the risks associated with the continued implementation of the merger between the Company and Galaxy Resources Ltd, risks that further funding may be required, but unavailable, for the ongoing development of the Company's projects; fluctuations or decreases in commodity prices; uncertainty in the estimation, economic viability, recoverability and processing of mineral resources; risks associated with development of the Company Projects; unexpected capital or operating cost increases; uncertainty of meeting anticipated program milestones at the Company's Projects; risks associated with investment in publicly listed companies, such as the Company; and risks associated with general economic conditions.
Subject to any continuing obligation under applicable law or relevant listing rules of the ASX, the Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in this Release to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statements are based. Nothing in this Release shall under any circumstances (including by reason of this Release remaining available and not being superseded or replaced by any other Release or publication with respect to the subject matter of this Release), create an implication that there has been no change in the affairs of the Company since the date of this Release. Not for release or distribution in the United States This announcement has been prepared for publication in Australia and may not be released to U.S. wire services or distributed in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction, and neither this announcement or anything attached to this announcement shall form the basis of any contract or commitment.
Mt Cattlin Any information in this announcement that relates to Mt Cattlin's Mineral Resources & Ore Reserves is extracted from the announcement entitled "Mt Cattlin Update" released on 6 June 2021 which is available to view on www.allkem.co. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the Mineral Resources and Ore Reserves estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement. Sal de Vida Any information in this announcement that relates to Sal de Vida Project Mineral Resources & Ore Reserves is extracted from the report entitled "Sal de Vida capacity increased to 45ktpa in two stages" released on 4 April 2022 which is available to view on www.allkem.co and www.asx.com.au. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the Mineral Resources and Ore Reserves estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement. Any information in this announcement relating to Sal de Vida scientific or technical information, production targets or forecast financial information derived from a production target is extracted from the ASX Announcement entitled "Sal de Vida capacity increased to 45ktpa in two stages" released on 4 April 2022 which is available to view on www.allkem.co and www.asx.com.au. The Company confirms that all the material assumptions underpinning the scientific or technical information, production targets or the forecast financial information derived from a production target in the original market announcement continue to apply and have not materially changed. Olaroz Any information in this announcement that relates to Olaroz Project Mineral Resources is extracted from the report entitled "Olaroz resource upgraded 2.5x to 16.2 million tonnes LCE" released on 4 April 2022 which is available to view on www.allkem.co and www.asx.com.au. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the Mineral Resources estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement. Any information in this announcement relating to Olaroz scientific or technical information, production targets or forecast financial information derived from a production target is extracted from the ASX Announcement entitled "Olaroz resource upgraded 2.5x to 16.1 million tonnes LCE" released on 4 April 2022 which is available to view on www.allkem.co and www.asx.com.au. The Company confirms that all the material assumptions underpinning the scientific or technical information, production targets or the forecast financial information derived from a production target in the original market announcement continue to apply and have not materially changed. Cauchari Any information in this release that relates to Cauchari Project Mineral Resources and Ore Reserves is extracted from the release entitled "Cauchari JORC Resource increases to 4.8 million tonnes Measured + Indicated and 1.5 million tonnes Inferred LCE" released on 7 March 2019 which is available to view on www.allkem.co and www.asx.com.au. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the Mineral Resource and Ore Reserve estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.
1 All figures are unaudited and contain non-IFRS metrics. Gross operating cash margin is calculated as revenue less cash cost of goods sold, freight and insurance. 2 All figures 100% Olaroz Project basis. 3 " FOB " (Free On Board) excludes insurance and freight charges included in " CIF " (Cost, Insurance, Freight) pricing. Therefore, the Company's FOB reported prices are net of freight (shipping), insurance and sales commission. 4 Revenue excludes tantalum sales from Mt Cattlin. 5 Previous quarterly ASX releases excluded partially owned subsidiaries available cash balances from the disclosed group cash balance. The increase in group cash balance factors in SDJ cash balance at 31 March 2022 of US$28.8 million.
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Allkem Limited (ASX|TSX: AKE) ("Allkem" or "the Company") will release its June Quarter Activities Report on Wednesday, 20 July 2022.
Managing Director and CEO, Mr. Martín Pérez de Solay and Chief Sales and Marketing Officer, Christian Barbier will conduct a live webcast briefing at 10:00 am AEST (Brisbane, Sydney, Melbourne) on the same day.
To pre-register your details and join the webcast briefing, please follow the link on the homepage of Allkem's website, www.allkem.co . Written questions may be submitted via the webcast and playback of the briefing and Q&A session will also be available on the company's website.
This release was authorised by Mr. Martin Perez de Solay, CEO and Managing Director of Allkem Limited.
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For a long time, most lithium was produced by an oligopoly of producers often referred to as the “Big Three”: Albemarle (NYSE:ALB), Sociedad Quimica y Minera de Chile (NYSE:SQM) and FMC (NYSE:FMC).
Rockwood Holdings was on that list as well before it was acquired by Albemarle several years ago.
However, the list of the world’s top lithium-mining companies has changed in recent years. The companies mentioned above still produce the majority of the world’s lithium, but China also accounts for a large chunk. It was the third largest lithium-producing country in 2021 in terms of mine production, behind Australia and Chile.
What’s more, Australia’s largest lithium mine, Greenbushes, is majority controlled by a joint venture between China’s Tianqi Lithium (SZSE:002466) and Australia’s IGO (ASX:IGO,OTC Pink:IIDDY). The joint venture owns a 51 percent stake in Talison Lithium, which runs the mine, while Albemarle owns the other 49 percent stake.
China is leading the way in global lithium processing and refining, but only held around 12 percent of the world's lithium raw material supply in 2020, according to S&P Global Market Intelligence analysts. In the future, China is expected to fuel lithium-ion battery production, which is set to increase substantially in the coming years.
In other words, lithium investors should be aware of lithium-mining companies in China, in addition to the New York-listed chemical companies that produce the material. Read on for an overview of the current top lithium-producing firms by market cap. Data was current as of February 28, 2022.
Albemarle is one of the largest lithium producers in the world, with 5,000 employees and customers in 100 different countries globally. Besides lithium, Albemarle produces bromine and provides refining solutions and chemistry services for pharmaceutical firms.
When Albemarle closed its acquisition of Rockwood Holdings in early 2015, it became a lithium heavyweight. The company owns lithium brine operations in Clayton Valley near Silver Peak in the US, as well as in the Salar de Atacama in Chile; as mentioned, it also owns a 49 percent stake in the massive hard-rock Greenbushes mine.
In 2018, Albemarle announced that its request for an increase in its lithium quota had been approved by Corfo, a Chilean governmental organization. The company is now authorized to produce up to 145,000 tonnes of lithium carbonate equivalent per year in Chile until 2043.
Albemarle later signed a deal to invest US$1.15 billion in a joint venture with Mineral Resources (ASX:MIN,OTC Pink:MALRF), which will own and operate the Wodgina hard-rock lithium mine in Western Australia. In 2019, the company began construction at the Kemerton lithium hydroxide processing plant near Perth.
Currently, the company’s La Negra III and IV processing facilities in Chile are in the commercial qualification stage, while the Australia-based Kemerton plant I achieved first production in July 2022. The Kemerton II conversion plant remains on track for mechanical completion in the second half of 2022.
Lithium producer Tianqi Lithium, a subsidiary of Chengdu Tianqi Industry Group, headquartered in China, is the world’s largest hard-rock lithium producer. The company has assets located in Australia, Chile and China.
In 2012, Tianqi beat out Rockwood Holdings to take control of Talison Lithium, which in turn controls the Greenbushes mine in Australia. However, it subsequently sold a 49 percent interest in Talison to Rockwood Holdings, which, as mentioned, is now owned by Albemarle.
Tianqi paid US$209.6 million for a 2.1 percent stake in SQM in September 2016, which it then boosted to 23.77 percent for US$4.07 billion in 2018.
The company has also developed a lithium hydroxide plant in the Kwinana Industrial Area, south of Perth in Western Australia. In 2019, Tianqi put expansion plans for its Kwinana lithium hydroxide plant on hold to focus on steady production first. The facility launched production in Q3 2019, and first output took place in mid-2021.
In 2020, Tianqi sold a stake in its Australian assets to IGO in a US$1.4 billion deal, giving a boost to the financially troubled Chinese company. With lithium prices on the rise, Tianqi returned to profit in the second quarter of 2021, posting its highest quarterly net profit since late 2018 in the third quarter.
In July 2022, the company listed on the Hong Kong exchange, raising about US$1.7 billion in its debut. Tianqi is planning to more than double its lithium refining capacity in the next three years to about 110,000 tonnes, up from about 45,000 tonnes now.
Jiangxi Ganfeng Lithium is an important Chinese lithium producer. It is China’s largest lithium compound producer, and is one of the world’s largest lithium metal producers in terms of production capacity.
The mining company has interests in lithium resources around the world, including Australia, Argentina, China and Ireland, but its primary source of lithium raw materials is Mount Marion in Western Australia.
The company listed in Hong Kong in 2018, the same year it bought SQM’s stake in Lithium Americas’ (NYSE:LAC,TSX:LAC) Cauchari-Olaroz lithium brine project in Argentina. In February 2020, Ganfeng upped its interest in Cauchari-Olaroz to 51 percent, taking a controlling stake in the asset.
Ganfeng also has supply deals with Elon Musk’s Tesla (NASDAQ:TSLA), BMW (OTC Pink:BMWYY,ETR:BMW), Korean battery maker LG Chem (KRX:051910) and Volkswagen (OTC Pink:VLKAF,FWB:VOW).
In 2021, Ganfeng continued to expand. The company agreed to buy the shares it does not already own in Mexico-focused Bacanora Lithium (LSE:BCN) for US$264.5 million; it also bought a stake in a lithium mine in Mali for US$130 million, as well as a salt lake in China for 1.47 billion yuan.
This year, the company continued its purchasing spree, with its eyes set again on Argentina. Ganfeng said it would buy private company Lithea, which owns the rights to two lithium salt lakes in Salta province, for up to US$962 million.
SQM claims to have a leading position in lithium and derivatives, holding a 19 percent share of the market, with offices in over 20 countries and customers in 110 nations across the globe. The firm has five business areas, ranging from lithium to potassium to specialty plant nutrition.
SQM’s primary lithium business is in Chile. The company has spent plenty of time butting heads with Chile’s Corfo over its leases in the Salar de Atacama, where the company’s lithium brine operations are located. After many failed meetings, SQM and Corfo came to a resolution in mid-January 2018.
In 2016, SQM and Lithium Americas announced they would develop the Cauchari-Olaroz lithium project in Argentina via a joint venture, marking SQM’s first investment in the raw material outside of Chile. Two years later, Ganfeng purchased SQM’s stake in the project.
Outside of South America, SQM is developing the Mount Holland lithium project in Australia, which is known as one of the world’s largest hard-rock mining deposits, in a joint venture with Wesfarmers (ASX:WES,OTC Pink:WFAFF), which took over Australian lithium-mining company Kidman Resources.
SQM is forecasting that its sales volume in 2022 will exceed 140,000 tonnes, with only 20 percent of sales expected to be in fixed contract prices or at variable prices with specific floors and ceilings.
Australia-listed Pilbara Minerals operates its 100 percent owned Pilgangoora lithium-tantalum asset in Western Australia. The operation consists of two processing plants: the Pilgan plant, located on the northern side of the Pilgangoora area, which produces a spodumene concentrate and a tantalite concentrate; and the Ngungaju plant, located to the south, which produces a spodumene concentrate.
The company, which hit commercial production in 2019, has partnerships with Ganfeng Lithium, General Lithium, Great Wall Motor Company (OTC Pink:GWLLF,HKEX:2333), POSCO (NYSE:PKX), CATL (SZSE:300750) and Yibin Tianyi.
In 2021, Pilbara Minerals acquired Altura Lithium following a cash payment of US$155 million. In January 2022, the company posted its first half-year profit of AU$114 million on the back of strong demand for lithium.
Allkem was formed following the AU$4 billion merger of Argentina-focused Orocobre and Australia’s Galaxy Resources. Headquartered in Buenos Aires, Argentina, Allkem is an industrial chemicals and minerals company operating a portfolio of lithium, potash and boron projects and facilities in the Puna region of Northern Argentina.
The company has built, in partnership with Toyota Tsusho (TSE:8015) and the investment division of the Jujuy government, the first large-scale, greenfield, brine-based lithium project in about 20 years at the Salar de Olaroz, with planned annual production of 42,500 tonnes of low-cost lithium carbonate. Additionally, Allkem and Toyota Tsusho are constructing a 10,000 tonne per year lithium hydroxide plant in Naraha, Japan. Pre-commissioning works are underway, with the company targeting operations by early 2022 and full ramp up after 12 months.
Allkem has also been advancing plans to develop the Sal de Vida lithium brine and potash project in Argentina. Aside from that, it owns the Mount Cattlin mine in Western Australia, which is currently producing spodumene and tantalum concentrate, as well as the James Bay lithium pegmatite project in Canada.
In 2022, the company outlined plans to increase its lithium production threefold by 2026 and become a top three chemicals supplier.
Livent, which was spun off from FMC in 2018, employs more than 900 people throughout the world and operates manufacturing sites in the US, England, India, China and Argentina.
The company operates its lithium business in the Salar del Hombre Muerto in Argentina, where it has been extracting lithium for over 20 years. The lithium carbonate produced serves as the feedstock for Livent’s downstream lithium hydroxide production. Livent also produces qualified battery-grade lithium hydroxide in both the US and China.
In 2021, Livent resumed its capacity expansion projects in the US and Argentina, backed by the execution of recent long-term supply agreements, an improving market outlook and continued local government and community support. Early in 2022, the company outlined plans for a second capacity expansion, which, once complete, will see its Argentina operations reach total annual lithium carbonate capacity of 60,000 tonnes, as well as 9,000 tonnes of lithium chloride capacity.
In July 2022, Livent inked a long-term lithium supply deal with General Motors (NYSE:GM), with the carmaker expected to prepay US$198 million to the lithium miner, which will supply lithium hydroxide starting in 2025.
Aside from the world’s top lithium producers, a number of other companies are producing this key electric vehicle raw material. These include: Jiangxi Special Electric Motor (SZSE:002176), Mineral Resources, Sichuan Yahua Industrial Group (SZSE:002497) and Youngy (SZSE:002192).
Lithium is a soft, silver-white metal used in pharmaceuticals, ceramics, grease, lubricants and heat-resistant glass. It’s also used in lithium-ion batteries, which power everything from cell phones to laptops to electric vehicles — demand for lithium from this sector is growing rapidly.
Lithium is found in hard-rock deposits, evaporated brines and clay deposits. The largest hard-rock mine is Greenbushes in Australia, and most lithium brine output comes from salars in Chile and Argentina.
There are various types of lithium products, and many different applications for the mineral. After lithium is extracted from a deposit, it is often processed into lithium carbonate, lithium hydroxide or lithium metal. Battery-grade lithium carbonate and lithium hydroxide can be used to make cathode material for lithium-ion batteries.
Global lithium production reached 100,000 tonnes of lithium last year, up from 82,500 tonnes in 2020, according to the US Geological Survey. About 74 percent of the lithium produced currently goes toward battery production, but other industries also consume the metal. For example, 14 percent of lithium is used in ceramics and glass, while 3 percent goes to lubricating greases.
The latest data from the US Geological Survey shows that the world’s top lithium-producing countries are Australia, Chile and China, with production reaching 55,000 tonnes, 26,000 tonnes and 14,000 tonnes, respectively.
Investors are starting to pay attention to the green energy transition and the raw materials that will enable it.
When it comes to choosing a stock to invest in, understanding lithium supply and demand dynamics is key, as there are unique factors to watch for in lithium stocks. The main demand driver for lithium is what happens in the electric vehicle industry, which is expected to keep growing, and also the energy storage space. Analysts remain optimistic about the future of lithium, with many predicting the market will be tight for some time.
Investors interested in lithium stocks could consider companies listed on US, Canadian and Australian stock exchanges. They can also check out our guide on what to look for in lithium stocks today.
This is an updated version of an article first published by the Investing News Network in 2016.
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Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.
Livent is a pure-play lithium producer that was formed when FMC spun off its lithium business in October 2018. Livent should benefit from increased lithium demand via higher electric vehicle adoption, as lithium is a key component of EV batteries. The company's low-cost lithium carbonate production comes from brine resources in Argentina. Livent also operates downstream lithium hydroxide conversion plants in the United States and China and has a 50% stake in a fully integrated Canadian lithium project.
Allkem Ltd formerly Orocobre Ltd is an industrial chemical and mineral exploration company. It explores and develops lithium, potash, and salar mineral deposits. The company's segments are Corporate, Borax, and Olaroz. The majority of the company's revenue is derived from the Olaroz segment. Its products are classified into minerals, refined products and boric acid used in various markets from agriculture, ceramics, glass, gold assay and smelting fluxes, wood protection and a variety of specialty applications. The company generates maximum revenue from Olaroz segment.
Sociedad Quimica y Minera de Chile is a Chilean commodities producer with significant operations in lithium ( primarily used in batteries for electric vehicles and energy storage systems), specialty and standard potassium fertilizers, iodine ( primarily used in X-ray contrast media), and solar salts. The company extracts these materials through its high-quality caliche ore and salt brine deposits. SQM is also developing a hard rock lithium project in Australia.
Ganfeng Lithium Co Ltd focuses on the development, manufacture, and sale of deep processed lithium products, lithium new materials, lithium power and energy storage batteries, lithium resources and lithium battery recycling, and others. The company's operating segment includes Lithium metal and compound, Lithium battery, and Lithium ore resource and others. It generates maximum revenue from the Lithium metal and compound segment. Lithium metal and compound segment manufacture and sale of lithium products and rendering of processing services. Geographically, it derives most of its revenue from Mainland China.
Albemarle is the world's largest lithium producer. Our outlook for robust lithium demand is predicated upon increased demand for electric vehicle batteries. Albemarle produces lithium from its salt brine deposits in Chile and the U.S. and its hard rock joint venture mines in Australia. Albemarle is also a global leader in the production of bromine, used in flame retardants. The company is also a major producer of oil refining catalysts.
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